06/02: Review: Harford's "The Logic of Life"
"The Logic of Life" Tim Harford, Little Brown, London 2008
The current champions of the economics of everyday life are Steven Landsburg, Tim Harford and the even more popular if less exclusively "economic" in focus, pairing of Levitt and Dubner. I would add David Friedman too - even if he has a slightly more academic focus.
The field is not new - it seems that all great economics thinkers were great writers about the study of man in the business of everyday life - Adam Smith, Alfred Marshall, Milton Friedman and numerous others.
The new breed however have hit nerves others missed. Tim Harford is perhaps softer than Landsburg but equally effective and his latest "The Logic of Life" is good squirmy stuff...
A useful feature of the more recent spate of "everyday economics" books does not concern economics at all but rather the sharp reminder they provide of what can be learned through the unrelenting application of simple logic. King of this has to be Landsburg.
His contention that more sex leads to safer sex does not rest on any economic proposition. Instead it is the simple result of the way proportions work.Similarly, Levitt and Dubner's original proposition regarding the link between increased abortion rates and a drop in crime rates has more to do with rigorous data analysis and interpretation than economics.
This has to be a good thing! More rigorous thinking is helpful when coming to deal with matters such as choice and opportunity cost.
My favourite Harford chapter - which examines the market in partners - combines the two. Some elegant explanations of price theory and logic give some unusual and useful (if uncomfortable) insights into how people pair up. The logic (as with the other examples) is undeniable. It also allows him to posit some interesting hypotheses (and I class them more in this category than the rather more "definite conclusions" category that Harford has them in) about town size, the geography of marriage markets and the patterns of urban versus rural settlement.
Another example of the use of logic and simply "working things through" is the very scary chapter on discrimination. Harford demonstrates the way in which various institutional arrangements in combination with the characteristics of random selection and rational behaviour can lead to blind and possibly harmful prejudice.
And this may give us a clue to the underlying economic theme which all of these authors explore - as Landsburg describes it in his first work in this area (The Armchair Economist), the discussions examine what happens if we make the assumption that behaviour is ever rational and self interested.
These works show how powerful that assumption can be and what an extraordinarily useful tool it is for developing explanations of human behaviour - just as Adam Smith suggested so long ago.
"The Logic of Life" is yet another great contribution to what I hope is a newly energised motivation to help people understand the world in a manner which will at least avoid more needless costs and hopefully add more benefits.
The current champions of the economics of everyday life are Steven Landsburg, Tim Harford and the even more popular if less exclusively "economic" in focus, pairing of Levitt and Dubner. I would add David Friedman too - even if he has a slightly more academic focus.
The field is not new - it seems that all great economics thinkers were great writers about the study of man in the business of everyday life - Adam Smith, Alfred Marshall, Milton Friedman and numerous others.
The new breed however have hit nerves others missed. Tim Harford is perhaps softer than Landsburg but equally effective and his latest "The Logic of Life" is good squirmy stuff...
A useful feature of the more recent spate of "everyday economics" books does not concern economics at all but rather the sharp reminder they provide of what can be learned through the unrelenting application of simple logic. King of this has to be Landsburg.
His contention that more sex leads to safer sex does not rest on any economic proposition. Instead it is the simple result of the way proportions work.Similarly, Levitt and Dubner's original proposition regarding the link between increased abortion rates and a drop in crime rates has more to do with rigorous data analysis and interpretation than economics.
This has to be a good thing! More rigorous thinking is helpful when coming to deal with matters such as choice and opportunity cost.
My favourite Harford chapter - which examines the market in partners - combines the two. Some elegant explanations of price theory and logic give some unusual and useful (if uncomfortable) insights into how people pair up. The logic (as with the other examples) is undeniable. It also allows him to posit some interesting hypotheses (and I class them more in this category than the rather more "definite conclusions" category that Harford has them in) about town size, the geography of marriage markets and the patterns of urban versus rural settlement.
Another example of the use of logic and simply "working things through" is the very scary chapter on discrimination. Harford demonstrates the way in which various institutional arrangements in combination with the characteristics of random selection and rational behaviour can lead to blind and possibly harmful prejudice.
And this may give us a clue to the underlying economic theme which all of these authors explore - as Landsburg describes it in his first work in this area (The Armchair Economist), the discussions examine what happens if we make the assumption that behaviour is ever rational and self interested.
These works show how powerful that assumption can be and what an extraordinarily useful tool it is for developing explanations of human behaviour - just as Adam Smith suggested so long ago.
"The Logic of Life" is yet another great contribution to what I hope is a newly energised motivation to help people understand the world in a manner which will at least avoid more needless costs and hopefully add more benefits.
